At the end of March, TIAA Bank’s Yield Pledge® Money Market had a very competitive MMA rate with a 1-year rate guarantee. Unfortunately, in April the rate fell from 1.75% APY to 1.40% APY. I decided a review would still be worthwhile since this 1.40% APY may become more competitive as rates continue to fall.

The one-year rate guarantee is for first-time Yield Pledge® Money Market account holders. Following the one-year rate guarantee, the Yield Pledge® Money Market will revert to the ongoing five tiered rates, currently ranging from 0.90% APY to 1.35% APY.

The last time I wrote about the Yield Pledge® Money Market was in the fall of 2017, when it was a part of EverBank’s product line (just prior to TIAA Direct’s acquisition of EverBank). A version of this offer has long been available at TIAA Bank/EverBank. My first review of this promo was in 2006. While the APY offered on the Yield Pledge® Money Market has rarely been a rate leader, the one-year introductory APY is appealing, especially in a falling rate environment. In the past, the rate guarantee period has been shorter.

We promise that the yield on your Yield Pledge® Checking and/or Money Market Account will stay in the Top 5% of Competitive Accounts based on the Bankrate Monitor National Index survey data from the last week of each month.

It should be noted that the Yield Pledge® Money Market does offer check writing. The MMAs at many online banks are more like savings accounts since there is no check writing.

Availability

Headquartered in Jacksonville, Florida, TIAA Bank debuted in June 2018, a year after TIAA acquired EverBank, a well-known pioneer in digital banking. Immediately following the 2017 acquisition, TIAA Direct and EverBank operated as separate brands with separate products, with a rebrand in the Bank’s near future. While the Bank is clearly known as “TIAA,” EverBank’s legacy continues in “Yield Pledge®” attached to several products.

Opening a Yield Pledge® Money Market must be done online. Funding can be done by and online or wire transfer from an outside bank or by mailing a check. While current TIAA Bank customers can also utilize the Bank’s mobile deposit app, funds from an existing TIAA Bank Yield Pledge® Checking Yield Pledge® Account or an existing TIAA Bank Yield Pledge® Money Market Account are not eligible for the 1-year introductory APY.

Bank Overview

TIAA Bank has an overall health grade of "A" at DepositAccounts.com, with a Texas Ratio of 4.30% (excellent) based on December 31, 2019 data. In the past year, TIAA Bank has increased its total non-brokered deposits by $3.22 billion, an excellent annual growth rate of 15.18%. Please refer to our financial overview of TIAA Bank (FDIC Certificate # 34775) for more details.

The original Teachers Insurance and Annuity Association (TIAA) was founded in 1918 by the Carnegie Foundation, establishing a fully-funded system of pensions for college professors. In June 2017, TIAA Direct acquired EverBank, eventually becoming TIAA Bank and offering a significantly expanded product line and services. TIAA Bank is currently the 49th largest bank in the country, with assets of nearly $42 billion and more than 833,000 customer accounts.

How the Yield Pledge® Money Market Compares

When compared to the Money Market accounts tracked by DepositAccounts.com that are available nationwide and require a minimum balance of $1k of less, TIAA Bank’s Yield Pledge® Money Market APY ranks fifth,* but the year-long rate guarantee may prove to be invaluable.

We are continuing to keep our rates up-to-date, but are just too many rate cuts for us to process the changes quickly. For the time being, please be aware that the rates listed at DepositAccounts may not reflect the latest rates published by the banks and credit unions.

Hope this message gets to Ken! I have found 99% total ignorance on NCUA/FDIC insurance coverage. The $250K limit is so misleading. I have been able to insure $500K at one credit union by establishing five CDs @ $100K under my individual ownership as PODs (informal revocable trusts) with the beneficiaries being identical on all accounts. Why is there so much ignorance on NCUA/FDIC Insurance? Most CSRs maintain that the limit is $250K!! Banking institutions with high rates are also extremely stupid not to educate their savers, missing out on additional deposits. One can insure over $1M at one institution by understanding the system! Ken, how about a tutorial on the NCUA/FDIC insurance estimator?

I can answer that question. The reason CSRs lack knowledge about FDIC/NCUA coverage is that FIs have no incentive to train them in this topic since the burden of loss on uninsured deposits is on the depositor not the FI. It's not up to the FI to ensure your deposits are insured it's up to you. They don't care because the insurance will only pay off in the event that the FI fails. And after the FI fails, what do they care what happens to your money?

The place to apply pressure here is on CONGRESS. They need to rewrite the laws so that depositors are not faced with the impossible task of trying to decipher the convoluted insurance rules in order to know whether they are insured or not. Either the FIs should not accept funds at all unless the deposits meet insurance limits so that if they take your funds you are guaranteed coverage, or, at the very least, the FIs should be required to inform you that some or all of your deposits are not insured before opening your account so you can decide what to do. This would shift the burden of monitoring the insurance from the depositor to the FI and eliminate this rediculous situation of Russian roulette that depositors are forced to play.

"One can insure over $1M at one institution by understanding the system!"

You can insure much more than that. Theoretically you can insure an unlimited amount.

But the problem is that in some situations it is very difficult to determine if you are insured. The insurance calculators are only as good as the information you put into them. If you don't use them right, you can get incorrect results.

The bottom line is that the burden of determining if you are insured should not be on the depositor, it should be on the FI. No calculator should be needed. The way the system is set up now it gives many depositors a false sense of security. (I am not talking about your specific case #3, as from what I have read of your post about these deposits it sounds to me like you have met the coverage requirements.)

But one caveat on your insurance coverage #3. From the way you described your accounts in this deposit on another blog it appears to me that you are insured for up to the $100k principle on each account for a total of $500k. However, you would not be insured for any amounts on deposit that exceed the $500k principle you already deposited. So any interest earned and credited to your accounts would not be insured.

True, always leave a cushion so that accumulated interest does not exceed the insured amount. One can always have the interest credited monthly to a money market so it can be transferred to another institution for safekeeping.

Ken, how about a tutorial on stacking accounts using the FDIC/NCUA insurance estimato?. One can insure accounts in excess of $1M if done using the estimator. Find most institutions are either uninformed or keep it a deep, dark secret. I discovered I could fully insure 5 $100K CDs at the same credit union using five individual accounts ion my name as PODs and the same beneficiaries on all.

Hooked -- Thank you so much for a posting a reasonable and succinct message on the topic of deposit insurance. And for not claiming that FDIC and NCUA deposit insurance coverage is a "sham", or that it's difficult to know whether one's deposits are insured.

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